This is interpreted as (100gp worth of Holy Water) or failing that (100gp worth of powdered silver and iron) either of which the spell consumes.
Here is why.
A vial of Holy Water costs 25gp per vial. You will find on page 152 of the PHB that Clerics and Paladin exclusively are able to conduct a non spell ritual using 25gp worth of powdered silver to create Holy Water from scratch.
This 'equal exchange' potential is reflected in the material components for Magic Circle and I believe one other spell I remember coming upon. In this instance you need a cleric or paladin to turn 25gp worth of an item into 25gp worth of a different item.
In the instance of Magic Circle you dont need a Paladin or Cleric (though Magic Circle are class spells for them), you need 100gp worth of Holy Water or 100gp worth of its base materials that create holy water; Powdered Silver (plus Iron because in most cultures Iron helps bind those tricky creature types that magic circle is so effective against), in the absence of Holy Water.
Churches, temples, and shops that stock holy water are not always available in a campaign setting. Or maybe you dont have 100gp to buy all that holy water. Asking the local smith to grind up some iron and a few silver bits though? Pretty simple in almost any campaign.
It is also important to note that nowhere in the current full range of 5th Edition spells (PHB, EE, SCAG) are there any 'mixing' of possible component cost options. Only ever equivelant exchange. If the spell must consume one thing, it always also consumes your other option which is always of equal value to the spell. You will never have a choice between a cheaper consumed material cost.